Anti-dumping Measures

Posted by Joanne Ryan Mp on March 16, 2015

I too rise to speak on the Customs Amendment (Anti-dumping Measures) Bill (No. 1) 2015. I thank the parliamentary secretary, the member for Paterson, for the implicit praise for the Labor Party policy in our last government. I embrace the bipartisan approach to this policy area because this is an important issue for my electorate, where Arrium—OneSteel—is located, for Victoria's manufacturing base and for Australia.

Last week I had an interesting meeting with Brendan O'Brien, the director of O'Brien Boilers Services, a local boy whose company is situated in Sunshine in the electorate neighbouring mine. He is a proud business owner and director in our area who is innovating and developing some outstanding solutions to energy production across Australia. This business prides itself on quality and, having tried cheaper imported products—in particular, steel—finds the short-term benefit of a cheaper price is a false economy as the quality does not stand up over time; the long-term maintenance costs cancel out the short-term gain in production. In the west of Melbourne, an area proudly represented by many on this side of the House, anti-dumping laws are vital to ensure our local industries are competing on a level field. But while some businesses have the capacity to make that judgement call, many competing on tight margins do not feel that they can. This can have very detrimental impacts on business and, as we have seen in recent reports, on consumers.

A recent example—and one I am sure we will hear a little about tonight—is in the electrical space and it demonstrates the danger of product dumping in Australia. It is the story of cheap imported electrical cabling. This cheap Chinese cabling, imported to Australia and sold in most of our major hardware stores, has been used by electricians in the domestic building market—a small price gain for electricians competing for business that is usually awarded on cost. The problem is that this cabling has been recalled due to its inferior quality; the product becomes brittle and thus has the potential to start house fires. But how do you go about recalling electrical cabling? Most home owners would not know what brand of cable was used when their house was being built so they are unlikely to make a claim.And then there is the question: at whose cost will the replacement be done? Surely not the poor electrician? The hardware retailer that supplied the substandard product? The Chinese manufacturer? This probably explains why only 15.5 kilometres of the 4,000 kilometres of defective electrical cabling known to have been used has been withdrawn—that is, less than 0.5 per cent of this dodgy product has been recalled.

These examples show why Labor in government had a strong record of protecting industry from dumping. Sure, it is important for our manufacturing industries—as we have already heard and will no doubt continue to hear—but it is also important for the average Australian consumer and the average Australian job. Labor established the Anti-Dumping Commission in 2013, after implementing anti-dumping legislation, and on several occasions amended the anti-dumping legislation to ensure it was focused and effective.

A recent example of the good work of the commission is the case involving Capral Aluminium, as we have just heard. Capral was significantly impacted by the rise of cheap Chinese aluminium being dumped into Australia for several years—and the company could probably be partly credited with the former government's decision to establish the Anti-Dumping Commission. Capral is a quality business with start-of-the-art facilities and a strong, well trained workforce. It was heavily impacted when cheap Chinese aluminium imports incurred only a seven per cent import duty when other countries were routinely charging 30 to 60 per cent. Capral brought this case to the Anti-Dumping Commission. The company recently received welcome news when Commissioner Dale Seymour found that the biggest Chinese exporter, PanAsia Aluminium, had indeed circumvented anti-dumping measures. As a result the Minister for Industry, Ian Macfarlane, approved a steep rise in duties. This is an example of the anti-dumping system working well and in Australia's interest.

This case also shows that our free trade agreements allow for anti-dumping duties to be imposed when dumping threatens to cause 'material injury to an Australian industry'. Apparently the US aluminium extrusion industry is enjoying a resurgence thanks to duties on Chinese product averaging 33 per cent but ranging as high as 400 per cent. China managed to capture 20 per cent of the US market by late 2009 but duties imposed since 2010 have crunched that to less than one per cent. Let's hope we have a similar outcome in Australia. Markets are tough places and Australia must play hard and fair. Our anti-dumping legislation means that we will be playing hard and fair—and 'fair' means not allowing countries to dump product and flood our markets the short-term with a view to killing off our industries in the long term, particularly where our product is superior and necessary for safety.

This legislation, which works to build on Labor's proud record, is a step in the right direction. We also welcome some new initiatives proposed to be introduced through regulation: the establishment of an anti-dumping information service; the expansion of the International Trade Remedies Advisory Service; the establishment of a market research function to enhance anti-dumping investigator capabilities; and the establishment of a central hotline for inquiries about Australia's anti-dumping systems. We welcome these measures because, as we have heard before, these are complex areas of law. Labor welcomes these as sensible measures. They will assist Australian industries to get information and start proceedings where dumping threatens material injury to an Australian company.

There are, however, some aspects of the legislation that Labor does not support. We do not support the abolition of the International Trade Remedies Forum. This forum brings together representatives from manufacturers, producers and importers as well as industry associations, trade unions and some government agencies. The forum was established in 2011 and formalised in June 2013 and was designed to provide strategic advice and feedback to the government during the implementation of proposed reforms. It was the stakeholder body that gave good feedback to government throughout those reforms. Its existence ensures continued engagement across the sectors. It ensures that all voices are heard and that the processes and penalties are constantly reviewed.

It is an important forum. It is an important piece of the puzzle to ensure that those conversations continue. It is a feedback and ideas mechanism—something governments should value, particularly in the protection of our industries. Its continuation would ensure that valuable dialogue between industries continues in the future. Given the current government's support, when in opposition, for the establishment of the forum, and given there was never a discussion about its abolition during the election campaign, Labor is not sure why the abolition of the forum is now proposed. This body was constructive, had bipartisan support and did good work. I know Labor will suggest amendments in the Senate that will ensure its ongoing capacity. The so-called increase in flexibility for stakeholder engagement, which the government seeks, could easily be accommodated by the forum's current structures.

We also have reservations about the introduction of fees. This second aspect of the legislation is the ability to charge a fee for review when making an application for the review of an anti-dumping practice. Whilst there is some justification for a fee for service, the introduction of fees may have a negative impact—particularly for small businesses wanting to bring forward a case. This introduction of fees also goes against the coalition's election policy. The coalition's Policy to boost the competitiveness of Australian manufacturing states:

The current anti-dumping laws are cumbersome, slow and prohibitively expensive for many Australian businesses to utilise.

The introduction of a fee, therefore, seems to be counterproductive to that idea. And given that later this week the government plans to introduce a further round of red tape repeal, why is this hindrance on business being introduced? Despite arguments that they are mostly triggered by importers, fees could still be a barrier for local business.

I want the businesses in my area to be growing and innovating, and many already do this. The dumping of cheap imports in Australia, in my view, achieves so little—a cheap, short-term gain that has been shown to be negated by long-term quality issues. We need to have a strong anti-dumping legislative framework to assist our local businesses to compete on a level playing field, and, mostly, from my perspective, to ensure hard-won jobs are secure into the future, because in the west of Melbourne these are good and important jobs that we need to ensure continue.

I therefore support the legislation but question the two pieces that might make the laws and the commission less effective. We have already seen, even where successful claims have been made and prosecuted, that local jobs have been lost. We should be keeping measures in the legislation that will ensure that there are continued conversations that includes all the important stakeholders. And when I say 'all the important stakeholders', I include the unions. I include the unions because of my very local experience where the unions, particularly in steel and aluminium, are working productively and collaboratively with business to protect the industry and to protect their jobs. A fee for review might discourage business, particularly small business, from prosecuting a case. So I have concerns there.

The abolition of the International Trade Remedies Forum could potentially hinder the responsiveness of government. Ensuring regular contact and dialogue with all stakeholders, including the unions, is critical to ensuring government remains responsive to this very live and shifting issue. As we have heard earlier, this is a very complex area of law, and so it remains live and there will be more loopholes found, I am sure.

I welcome the government's continuation of Labor's hard work on policy and legislation in this area—as do businesses, industries and unions in my electorate. In fact, this area of anti-dumping sees intense collaboration between business and unions. They are all working hard to stay competitive and working together to ensure the viability of the businesses and the jobs they have created. I commend the bill to the House, but suggest the amendments to two areas.